Amber Rudd has announced that the controversial two-child benefit cap for Universal Credit will be relaxed – just as it was revealed that four single mothers had defeated the DWP in the courts over Universal Credit assessments.

The Work and Pensions Secretary fell short of scrapping the child benefit cap altogether – a long-requested step from child poverty campaigners. But Rudd said that the cap was “unfair” so will not be retrospectively applied to children born before the policy was introduced in April 2017, potentially helping 15,000 families.

However, while she was outlining the plans for the benefits system, vocal child benefit cap critics Child Poverty Action Group (CPAG) announced the news from High Court that the DWP had lost a judicial review having been found to have interpreted UC regulations incorrectly.

The four mothers lost several hundreds of pounds each year and were subject to large variations in their universal credit awards because of the dates on which their paydays and universal credit ‘assessment periods’ happened to fall.

When they clashed with bank holidays or weekends, for example, the claimants received fluctuating amounts – sometimes receiving two payments and receiving nothing in other months, resulting “severe cashflow problems”.

Danielle Johnson, Claire Woods, Erin Barrett and Katie Stewart say they have been struggling to make ends meet since the benefits shake-up was introduced, with some plunged into debt.

The win follows a hearing in November when the group’s lawyers said the botched benefits shake-up is likely impacting “tens of thousands” across the country. Judges Lord Justice Singh and Mr Justice Lewis said regulations had been “wrongly interpreted”

When they brought the judicial review against work and pensions secretary Amber Rudd, the women pointed to a “fundamental problem” with the system and said they could not manage household budgets as their monthly payments varied “enormously”.

The four specifically challenged the DWP’s method for calculating the amount to be paid to benefits recipients.

Lord Justice Singh and Mr Justice Lewis said in their judgement that this led to “nonsensical decisions” that were “odd in the extreme”.

CPAG’s solicitor Carla Clarke said: “This is a very welcome and common-sense judgment which clearly establishes that the DWP has been applying its universal credit regulations incorrectly.

“Working parents on low incomes should not lose out on the support that parliament intended them to receive because the DWP has designed a rigid process that is out of step with both actual reality and the law.”

Rudd also said that weekly and fortnightly payments will be made more accessible and there will be more efforts to help women who were previously written off as dependents and left without access to payments.

“I know there is more to be done to support the most vulnerable and finesse the system so Universal Credit truly works for everyone,” she said. “The goal is clear a safety net but also a system that can transform lives through work, not just financially but through life chances, health and social well-being.”